Mining sector, Morrison government on the defensive over IPCC report

By Peter Hannam & Cole Latimer

8 October 2018 — 6:00pm

Australia's mining industry and the Morrison government have rejected an international climate report that demands nations phase out all coal-fired power by mid-century and leave most fossil fuel reserves untapped to avoid dangerous global warming.

Sunset for coal and other fossil fuels? Not yet, says the Morrison government.Credit:Nic Walker

Prime Minister Scott Morrison led his government's defence of miners, saying the IPCC report did not "provide recommendations to Australia" and that his government's focus would be "to ensure that electricity prices are lower" for households and businesses, alike.

Resources companies, though, fell on the Australian Stock Exchange, led by South32, the mainly coal miner spun-off from BHP. Its price sank 5.4 per cent or more than triple the overall market's slide of 1.4 per cent.

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Industry groups, such as the Queensland Resources Council, dismissed the prospect of an early demise for the country's coal sector, saying Australian coal boasted relatively low emissions.

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"There is a role for high-quality Australian coal and it's compatible with meeting Paris emissions reductions targets," Ian Macfarlane, council chief executive and a former Coalition energy minister.

"Our economy depends on the coal industry, and we can have both a strong coal industry and reduce carbon emissions."

The NSW Minerals Council likewise said coal had "very positive" future in the state, with strong demand from traditional and emerging export markets, a spokesman said.

"There are positive signs that these good conditions will continue in coming decades," he said, citing a recent industry forecast that annual Asian demand for coal burnt in power plants would jump by half from about 740 million tonnes to 1.147 billion tonnes by 2030.

Carbon budgets

However, the IPCC report's authors said the world would face severe consequences if the great bulk of fossil fuels including coal, oil and gas, weren't left in the ground.

At 1.5 degrees of warming, compared with pre-industrial levels, as much as 90 per cent of the world's coral reefs will die, and virtually all would be lost if temperatures rose two degrees, or about twice the increase so far.

Mark Howden, head of the Australian National University's Climate Change Institute, said emitting the equivalent of about 420 billions of carbon dioxide would exhaust the remaining carbon budget to cap warming at 1.5 degrees. Current annual emissions are about 42 billion tonnes, implying about a decade of pollution before "the need to go vertical" to zero emissions to keep within the temperature limit.

Emissions will need to fall 45 per cent from 2010 levels - or 58 per cent from 2015 totals - by 2030, the IPCC said.

Melissa Price, the federal Environment Minister, said the government would consider the IPCC report, saying the government "is committed to the Paris Agreement and takes its international obligations seriously".

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"We’re particularly concerned about the implications for coral reefs, with the report finding climatechange will impact reefs across the world, including Australia," she said.

The Paris accord was signed three years ago by almost 200 nations, who pledged to keep warming to 1.5-2 degrees. Australia's pledge is to cut 2005-level emissions 26-28 per cent by 2030, a target environmental groups such as the Climate Action Tracker describe as "insufficient".

Labor, Greens

Both Labor and the Greens attacked the Coalition government, signalling the likelihood that climate change will become a major issue at the next federal poll due by mid-2019.

Senator Wong said "the government’s own data shows they will fail to meet their already inadequate Paris targets with pollution rising all the way to 2030".

Labor has pledged to increase Australia's carbon reduction effort to 45 per cent from 2005 levels and roughly triple the current share of renewable energy to 50 per cent by 2030.

Adam Bandt, the Greens climate spokesman, said the IPCC report showed it was "time to hit the climate emergency button", and that neither major party was prepared to take the necessary steps.

"If we don’t quit coal, we are screwed," said Mr Bandt. "Business as usual under Liberal and Labor is a death sentence."

Shutting down

Market forces, at least in Australia, indicate an exit from coal in the electricity sector is likely for all major plants by 2050 - unless governments intervene to extend their lives.

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Origin Energy, for instance, plans to shut the Eraring coal-fired power station in NSW - Australia's largest - by 2032.

"We believe that net-zero emissions for the electricity sector by 2050 or earlier is achievable," Origin chief executive Frank Calabria said in the company’s 2018 Sustainability report.

One industry hoping to benefit from any shift towards low emissions in the carbon capture and storage (CCS) industry, a sector singled out by the IPCC as necessary if global temperatures are to avoid "overshooting" the targets.

"This is a pivotal part of turning back the climate change siege," he said. "We’re starting to see a wider acceptance that more needs to be done to fight climate change, and CCS is part of this 'more'."